What is blocking Adblock Plus’s ambition?

Adblock Plus, which has led the growth of adblockers over the last couple of years, made a major announcement earlier this week that it hoped would establish it as an important player in the advertising technology ecosystem.

Within 24 hours those plans appear to lie in tatters. Adblock Plus has an impressive user base and product, so what’s holding it back? We’ll take a look at what happened this week and its implication for publishers and advertisers.

From its origin, ABP has frustrated publishers and advertisers alike. Adblockers started out as an esoteric, fringe activity but have become more mainstream, attracting 26% of all adults in the US (emarketer 2015), powered by rapid uptake in Asia, and mobile (accelerated by Apple’s release of iOS 9 last June which enabled browser plug-ins on mobile devices).

On Tuesday at the DMEXCO conference ABP announced its intention to become a grown-up player in the global ad-tech industry. Today that dream appears to have been quashed by two of the tech giants that ABP have spent years trying to undermine.

To understand what has been announced, let’s quickly recap how an adblocker works:

A user downloads the “Adblock Plus’ plug-in to their browser, for free,

The plug-in is able to identify all the ads coming from ad-servers and block them,

Originally all ads were blocked. Now ABP have created a ‘whitelist’. If an advertiser is accepted onto the whitelist (“acceptable ads initiative”) then their ads are not blocked,

The criteria for getting onto the whitelist is determined by a group of ABP users, not ABP (they are at pains to point out its independence) and is based around the IAB’s principles of best practice,

Whilst around 90% of the advertisers on the whitelist don’t get charged, ABP do charge the largest 10% of advertisers a ‘transaction fee’ to cover the administrative costs involved in servicing the large volume from these advertisers.

ABP’s new service is called the ‘Acceptable Ads Platform’. It is a natural evolution of the‘Acceptable Ads Initiative” – effectively working as a SSP (Supply Side Platform).

Since ABP has not historically had a great relationship with many publishers, it has partnered with an Israeli ad-tech company called Combotag which has an established network of publishers.

Combotag sees it as beneficial for the web user to be able to have better quality ads and an enhanced web experience.

The other party at the table is the advertisers, and Combotag has an existing relationship with Google and AppNexus to serve ads which are bought via their DSP (Demand Side Platform). In theory this should allow publishers to monetise ad inventory which is otherwise blocked, and allows advertisers to reach users who would normally be unreachable and ABP take their cut along the way.

Within hours of the announcement Google and AppNexus terminated their relationship with Combotag and have gone on to express their disdain for the model with Google saying,

“Ad blocking is a symptom of bad ads online and that’s why we believe the industry needs to align around a standard – backed by data and insights from conversations with real consumers – for what constitutes a better ads experience online.”

Appnexus similarly pulled no punches:

“AppNexus does not work with companies like Eyeo; we regard their business practices as fundamentally harmful to the ecosystem. Essentially, Eyeo, via its Adblock product, erects toll booths on a public road and siphons off advertising dollars that should be going directly to publishers. We hold that practice in low regard.”

With 500m downloads across the globe, ABP claims a mandate to fight on behalf of users to achieve a better web experience for all.

ABP is still engaged in an arms race with Facebook, who continually try to circumvent ABP and in effect block them, followed by counter-measures from ABP.

ABP have tried to take the moral high ground by claiming that Facebook is ‘anti-user’. But it is hard to take the moral high ground and talk about putting users’ needs first when many of their users see this latest move as effectively undermining ABP’s own raison d’etre, “So, the program that is supposed to block ads is going to be showing ads…. It will be uninstalled” (Comments on ABP’s blog).

Further attempts to commercialise their platform by selling ads can only alienate their base further, and negatively impact their ongoing user growth. Having irked Google and Facebook, who together control two thirds of the world’s ad inventory, it is unclear where ABP will go from here.

On paper ABP has some valuable assets, such as:

More than 500m downloads – although what proportion are active users is unclear.

An internationally recognised brand name that is synonymous with the product category.

A treasure trove of data of how users behave.

If I were an investor in Eyeo, the German company behind ABP that was founded in 2011, I would want to see a plan that shows how to start monetising this year.

It can’t be cheap to fight all the legal battles with publishers, nor constantly be developing new releases to counteract blocking moves from publishers with deeper pockets like Facebook.

As a consequence ABP are attempting to reach out to both Publishers and Advertisers with more conciliatory language and opportunities to participate through Acceptable Ads.

The critical element that ABP is missing is trust. In addition to making enemies of some powerful players they have exacerbated the negative perception of adblockers amongst the publisher and advertising community and now their own users.

They are still seen as being subversive, or at best mercenary. They’ve got a long way to go to convince highly reputable publishers and advertisers that they are a dependable and long term partner.

ABP solved a problem very successfully, now they have to decide whether to remain outside the advertising establishment as an ad-blocker continuing to solve that problem for their users or try to become an advertising technology company serving publishers and advertisers. They cannot do both with their existing brand and business model.

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